Three alternative ways to allocate the cost of the CF produced in a water supply and distribution system

Abstract

Greenhouse gas (GHG) emissions are considered to be the main cause of climate change, globally. On one hand, specific targets regarding these emissions have been already adopted in a European level. These targets include 20% reduction of GHGs and 20% reduction of energy consumption until 2020, below 1990 levels. Furthermore, EU leaders, going one step forward, have endorsed the objective of reducing Europe's GHG emissions by 80-95% compared to 1990 levels, until 2050. A number of initiatives have been adopted in order to fulfill these expectations. On the other hand, it is widely recognized that every product's supply chain consists of high energy-consuming processes. Carbon footprint (CF) is a parameter that should be integrated in the improvement of these processes' energy efficiency. In this paper, three new approaches of the CF, which produced cost allocation (end-user pays, production based, and profit based), among producers and users are being analyzed. These approaches' differences are focused to the "blame" put to each stakeholder involved, during the different phases of the "product's" life cycle. Everyone should pay a fair price to fully recover the costs related to the entire process. This could only lead to a socially just pricing policy of a product and to improvements in the performance targets of an organization.